LANDLORDS IN TROUBLE WITH DEPOSIT PROTECTION – Don’t get caught out! | Discuss

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LANDLORDS IN TROUBLE WITH DEPOSIT PROTECTION – Don’t get caught out!
05/05/2012
2:43 pm
mary latham
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The landlords in these
cases did not like the solution but at least they have one. From 6th
May 2012 the only option is to give 100% of the deposit back, unless the tenant
agrees that you can keep some of it to cover damage or losses, and hope that
the tenant does not take legal action to gain up to 3 times the same amount
because it was not protected.

 

These are just 3 of the stories that I have heard in the
last few days from landlords who have unprotected deposits

  • A tenancy has just come to an end and the tenant
    is moving out with several weeks of rent outstanding and damage to the
    property. The signed AST states that the tenant paid a deposit but the money
    was not in fact paid. The tenant is now asking for the deposit back otherwise
    he will take legal action to get 4 times the deposits back because the landlord
    has not protected it.

Landlord question “ Can he do this even though he has not
paid and he owes me money.  Can’t I just
say that the deposit is being kept to cover the rent arrears?”

My reply “ Yes you can but that will not prevent the tenant
taking legal action because you did not protect it and he may get up from the
full amount of the deposit that was paid according to the AST and up to 3 times
that amount on top”

Landlord “But he can’t prove that he paid it and he owes me
money”

My reply “He does not need to prove he paid it, you signed
an AST stating the amount of deposit and you would need to prove that it was
not paid – how will you do that?”

Landlord “What can I do?”

My reply “Protect the deposit (this happened last week it
would not be too late) and give him the protection certificate and prescribed information.
If you have proof that he has not paid and that he has caused damage you can
fight your corner if he goes for arbitration. 
If you had called me next week you would have big problems because you
have held the deposit longer than 30 days and the new legislation kicks in on 5th
May”

 

Another similar story but this call came yesterday

  • A landlord has several tenancy agreements which
    state the amount of deposit that should have been paid.  Both the landlord and the tenant have signed
    these AST’s BUT the deposit has never been paid.

Landlords question “Am I in the clear because I haven’t got
the deposits?”

My reply “ NO! If the AST states that a deposit has been
paid and you have signed the AST and given a copy to your tenants they may say
that they have paid in cash.

Landlord “But they haven’t  paid me anything and they are  good tenants so I haven’t bothered to chase
them”

My Reply “What would you do to defend yourself if one of
your tenants took legal action to recover the deposit (as stated on the AST) plus
up to 3 times the amounts?”

Landlord “So what shall I do now?”

My reply “You have no option but to protect the amount
stated in the AST and give your tenants copies of the protection certificate
and prescribed information”

Landlord “But that will look like they have paid and they haven’t”

My reply “Yes it will but the alternative is to take a
chance that the tenants won’t realise that they could get a lot of money from
you because the AST states that they HAVE paid. 
You might try getting the tenants to sign a separate document to say
that they still owe you the money but that you have protected it in good faith.
If they refuse to sign you will be forced to deal with the deposit at the end
of the tenancy as though it had been paid.”

Stunned silence.

  • The tenant paid the deposit but the landlord
    agreed that he would use it to cover the last months rent. The tenant is now
    asking for the deposit back because he has found out that the landlord should
    have protected it and hasn’t.

Landlord “Is he right, can he get
4 times the deposit from me if I don’t give him his deposit back?”

My reply “Yes he is right
although you can still protect the deposit up to today and give him the
protection certificate and prescribed information”

Landlord “Or I could just him his
deposit back, it might be less hassle”

My reply “Yes you could do that
but there is nothing to prevent him taking the deposit back and still taking
legal action because you did not protect it. 
If he has been dishonest about using it to cover the rent and still
wanting it back do you trust him? If you do protect it and you can prove that
he used it to pay the last months rent you will not have to pay it back.”

Landlord “He sent me an email
asking me to use the deposit and I sent him one back to say I would”

My reply “Brilliant you have the
prove that you need if he should go for arbitration”

Tenants are being educated by www and where there is so much money up for grabs even a “nice” tenant might be tempted.

08/05/2012
11:10 am
doug
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A landlord friend of mine has been trying to evict a benefit claiming non-EU family from his home since December 2010.

The woman won't pay her share of the rent and currently owes several thousands of pounds, has wired directly into the mains socket and so invalidated the insurance, refuses the landlord access to the house, she wouldn't let the police in to check on her children after concerns were raised by the social services so they (the police) smashed down the front door and she has left piles of rubbish in and around the house.

He's been to court 3 times, at the last hearing the judge gave her 4 weeks to vacate the property. Her legal aid funded solicitor is now appealing the decision stating that she claims she was never given the DPS certificate so the eviction order is invalid, the landlord claims she was given it a year ago.

Her solicitor is also threatening to sue the landlord for damages unless he drops the eviction order and gives her a years tenancy agreement at housing authority rents, which are considerably lower than the private rental value.

As the rent isn't being paid the landlord can't pay the mortgage and is in danger of having the property repossessed, she however will probably be able to remain living in it. He can't get legal aid as he has 'assets' – the house she won't pay the rent on.

Apart from jumping off a cliff, is there anything the guy can do?

08/05/2012
5:58 pm
mary latham
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I was waiting for this, its the first but it will not be last, case where the landlord has missed the deadline to the tenant the paperwork to prove the deposit has been protected because the 30 days grace is over. At this moment these are the only options I can see

TELL THE ELECTRICITY SUPPLIER THAT THE TENANT HAS WIRED INTO THE MAINS SOCKET AND ASK THEM TO CALL TO MAKE SAFE.  If she does not let them in they and they are concerned for the safety of her and the children they may cut off the supply but that will be her fault not yours. DO THIS WITHOUT DELAY.

Tell Social Services that you are concerned about the safety of the children and explain what she has done with the electricity.  Tell her Solicitor, in writing, that you have done so and ask if he wants to be resposible for the well being of those children.

1. The landlord should give the tenant the certificate and prescibed NOW and get a witness statement as evidence and take the chance that the Judge will be kind and not impose the maximum penalty of the full deposit plus 3 times the same amount. Asks the court to reduce the final figure by the amount of rent that is still outstanding and grant possession. They probably will not grant possession if a Section 21 has been used and there is no evidence that the prescribed information was given but its worth a try at this point.

2. Do not wait for the above serve a Section 8 on grounds 8, 10 and 11 after the date that the above has been done and ask for the outstanding rent. If the above fails ask the court to enforce this notice 2 weeks after service on the tenant. It will take a while to get into court but will succeed if the landlord has proof of minimum 8 weeks rent arrears.

3. The landlord should send evidence to the Solicitor and the court  that the documents were given to the tenant – I have assumed above that there is no evidence at the moment?

4. Go to the local authority with evidence of outstanding rent and ask for direct payment of LHA – tenants often move out when they stop getting the rent to spend and the local authority MUST pay the landlord if there is proof of 8 weeks contractual rent arrears. 

DO NOT ISSUE ANOTHER AST or give in to any other threats made by the Solicitor. It may take time but if the landlord abides by the law and goes through the legal procedure above possession will be granted and meanwhile the local authority will be paying the rent.

 

Good luck please post to tell us how things go and thank you for posting this story as a warning to other landlords. I hope that this tenants details have been given to LRS so that a warning can go out to prevent landlords from taking her when she is evicted? The local authority will have an obligation to find them a home but they will get direct payment of rent. – Unless the local authority is one of those who have joined LRS!!!

08/05/2012
7:37 pm
richard.gore@gregglatchams.com
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I agree with Mary.

There may be an additional ground to use on the Section 8 notice – that of anti social behaviour . This might justify a shorter notice period but may be hard to prove to persuade a court but perhaps worth including.

Happy to chat through if required.

08/05/2012
8:00 pm
mary latham
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Good point Richard particularly if the Police have been involved.  What a kind offer of help I do hope that Dougs friend will take you up on that it sounds like she needs all the support that she can get.

09/05/2012
9:51 am
doug
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I joined the deposit protection service (http://www.depositprotection.com) when I rented out my first property 18 months ago, once the deposit is registered with them THEY send out the certificate to the tenant.

I've just spoken with them and it appears that I should also have printed out two other documents and given them to the tenant, these are the DPS terms and conditions and the prescribed information template, which the tenant has to sign.

I thought I was covered by the fact that they send out the certificate, now it appears that the tenant could still sue me for 3 times the value of the deposit even though it's deposited with the DPS and they have sent out the certificate.

One other thing, the original tenancy agreement was for 6 months, after which the deal referts to a rolling month, so either party can cancel the tenancy with one months notice. Are these still legal?

09/05/2012
10:15 am
richard.gore@gregglatchams.com
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If you mean are the rolling tenancies (called periodic tenancies) legal then the answer is yes. Tenant can give one month notice – landlord still needs to give 2 months notice in line with a two month period under the original tenancy.

09/05/2012
12:42 pm
mary latham
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doug_horrigan@yahoo.co.uk said:

I thought I was covered by the fact that they send out the certificate, now it appears that the tenant could still sue me for 3 times the value of the deposit even though it's deposited with the DPS and they have sent out the certificate.

 

Many landlords have been caught out by this and it is VITAL that we all remember that we cannot devolve our legal responsiblities to any person or organisation.  Good practice is for the LANDLORD to send out the paperwork, including the Protection certificate and get prove that you have done so and your back will be covered.

I hate that landlords are going to get into trouble simply because they have not sent out the information at the correct time, in my opinion so long as the landlord has sent the protection certificate and the tenant knows his money is safe there should only be a small fine for not sending everything else – the law does not agree with me sadly and this is why I keep banging on to make sure that landlords know what they need to do.

 

14/05/2012
3:43 pm
MARY LATHAM
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Another landlord might have been caught out here http://www.landlordreferencing…..g-agent-1/

15/05/2012
1:38 pm
LyndonBaker
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The new legislation means that all deposits, even those already protected, must have the prescribed information given to tenants or landlords could be liable to repay the deposit and “fined” up to three times the deposit. The tenant has up to SIX YEARS to make a claim – I would love to know what numpty thought that was a fair time period!

I have just emailed all our tenants and attached the ELEVEN pages of T & C of the DPS. Eleven pages!!! So much for going green!

May I remind everyone that yesterday was the start of SafeAgent Awareness Week: http://www.brpl.co.uk

15/05/2012
2:11 pm
Paul Routledge
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Hi Lyndon,

I was amazed that one of the issues about small business growing on BBC news this morning was about the red tape and paper work Ha Ha made me laugh. I wonder how we can stream line our business in what we have to do just to let out a property.

Check them out on Landlordreferencing.co.uk
Carry out EPC.
Carry out inventory.
Create tenancy agreement.
Gas safety certificate.
Electrical pat test.
Fire alarm test + 40 page fire risk assessment for HMO’s for each building.
Register deposit.

What have I missed?Laugh

15/05/2012
6:57 pm
LyndonBaker
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Hi Paul

You missed checking out the tenants through a company called Landlord Referencing Services!!!Laugh

15/05/2012
7:21 pm
Paul Routledge
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No I didnt’Laugh

17/05/2012
6:04 am
Sharon Carmichael
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Paul Routledge said
Hi Lyndon,

I was amazed that one of the issues about small business growing on BBC news this morning was about the red tape and paper work Ha Ha made me laugh. I wonder how we can stream line our business in what we have to do just to let out a property.

Check them out on Landlordreferencing.co.uk
Carry out EPC.
Gas safety certificate.
Electrical pat test.
Fire alarm test.
Create tenancy agreement.
Carry out inventory.
Register deposit.

What have I missed?Laugh

 

All bloody red tape that small businesses are complaining about yet nothing gets done to alleviate the time and expense surrounding the above – all red tape of course apart from – Check them out on Landlord Referencing, Carry out inventory, Create Tenancy Agreement!!!! Wink

18/05/2012
12:05 pm
LyndonBaker
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Hi Paul

 

Apologies – I should have gone to Specsavers! Embarassed

 

Supporting SafeAgent Awareness Week: http://www.brpl.co.uk

23/10/2017
6:47 pm
Patricia A
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Does anyone know what a DPN deposits protection certificate is ? 

All the deposit protection certificates that my tenants are given to sign have a DPC reference number on them ? 

26/10/2017
2:36 pm
Patricia A
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mary latham said
doug_horrigan@yahoo.co.uk said:

I thought I was covered by the fact that they send out the certificate, now it appears that the tenant could still sue me for 3 times the value of the deposit even though it’s deposited with the DPS and they have sent out the certificate.

 

Many landlords have been caught out by this and it is VITAL that we all remember that we cannot devolve our legal responsiblities to any person or organisation.  Good practice is for the LANDLORD to send out the paperwork, including the Protection certificate and get prove that you have done so and your back will be covered.

I hate that landlords are going to get into trouble simply because they have not sent out the information at the correct time, in my opinion so long as the landlord has sent the protection certificate and the tenant knows his money is safe there should only be a small fine for not sending everything else – the law does not agree with me sadly and this is why I keep banging on to make sure that landlords know what they need to do.

 

  

The My Deposits team do not send out the certificates to the tenants. None of my tenants have been given one. My son who rents , did not get a certificate and certainly did not sign for it. .

The landlord has to make sure they give the printed off certificate with all the other leaflets and have a copy for the tenant and a copy for the landlord . I give all my tenants their own copies of everything and they sign and date. Tenant signing and dating  the info for tenants leaflet.

My son rents and was never given a copy of his deposit protection certificate and had to ask for it when he left his tenancy and handed his keys in. He has not received his deposit back yet . My Deposits have requested the return of his money. May i also say that if you are on the phone to My Deposits enquiringly,  you can get charged £4.61 for the privilege . I have the bill. 

26/10/2017
3:02 pm
Patricia A
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Patricia A said
Does anyone know what a DPN deposits protection certificate is ? 

All the deposit protection certificates that my tenants are given to sign have a DPC reference number on them ?   

I have answered my own question 

Most landlords use the insured Deposits scheme whereby the landlord pays a fee and keeps the money himself . This is called a DPC deposit form 

I was informed when i phoned My Deposits that letting agents use a different scheme . That letting agents put the deposits into a custodial deposit. Letting agents do not,  as far as i know pay a fee. This custodial deposits certificate is called a DPN .

My Deposit keep the tenants money and ask permission of the letting agent before they release it. I was told quite a lot of things in my nearly £5 call that made me wonder about how the system really works? 

I learn’t things that I , as a landlady i thought i knew , should have known,  but did not know. It made me revise whether i, as a private landlord wanted to keep using the scheme. 

Also . How can a tenant be expected to pay such a phone call bill to inquire with My Deposits about a problem they have. 

I am beginning to understand how the good private sector landlords are not being appreciated and losing out in this Licensing, deposits law game. 

If a tenant that has a problem with a bad letting agent or bad private landlord has to hang on the phone for hours. Wait weeks for an email reply, take loads of time off work to go to appointments at Shelter etc or- as one tenant was advised-  get a private solicitor to take the bad landlord to court. The rogue landlords will always be with us. 

When talking about rogue landlords i am referring to intentionally bad landlords . 

Not the landlords who are trying to be legal and are swamped with red tape

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